The price of a shirt is $20. Charlie can produce a shirt at a marginal cost of $10, Mac can produce a shirt for $18, and Dennis can produce a shirt for $22
For a shirt, Deandra has a marginal benefit of $25, Frank has marginal benefit of $20, and Artemis has a marginal benefit of $18. Which of the following statements is correct? A) The sum of consumer surplus is $5 and the sum of producer surplus is $12.
B) The sum of consumer surplus is $12.
C) Only Frank and Artemis will purchase a shirt.
D) Only Dennis will produce a shirt.
E) The sum of producer surplus is $10.
A
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If Fred's marginal utility of pizza equals 10 and his marginal utility of salad equals 2, then we know that
A) his indifference curves are convex. B) his indifference curves are L-shaped. C) his indifference curves are linear. D) his indifference curves are downward sloping.
If two or more markets are closely related,
A) a partial equilibrium analysis will tend to overstate the price impact of a supply shock. B) a partial equilibrium analysis will tend to accurately predict the price impact of a supply shock. C) a partial equilibrium analysis will tend to understate the price impact of a supply shock. D) they should be analyzed concurrently but using partial equilibrium analysis alone.